Misclassifying Workers - A Nebraska Workers Comp Problem

Things are still tough out there! With the economic down turn we are seeing more and more employers incorrectly classifying their employees as independent contractors or subcontractors instead of employees all in the hopes of reducing the cost of workers compensation, employee benefits, payroll taxes and unemployment insurance. This scary trend is rampant in the construction industry.


For workers compensation purposes, when an employer purposefully misclassifies an employee as an independent contractor they are trying to avoid paying workers compensation premium on that employee. By doing so, the employer would potentially save many thousands of dollars in workers comp premium. Unfortunately employers who practice this activity leave their workers exposed to uncovered on the job injuries. Leaving the employee's only recourse for compensation that of pursuing a legal outcome against the employer either through the state authority. through the courts or both. All flying against the basic reasoning for workers compensation protection, that of protecting the employee.

So here's the scoop...look for more individual state legislatures and the IRS to crack down hard on those employers who abuse the independent contractor/employee status. As a matter of fact, Nebraska has a current workers comp bill pending that, if passed, will impose heavy fines on employers who treat workers as independent contractors in violation of their states definition of an employee.

Yes it's tough out there, but congratulations to the State of Nebraska for their efforts in correcting this big workers compensation problem found in the construction industry!

Check out this link for more information on Nebraska Workers Compensation.